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Proactive Staff Planning The Impact Of The Past, Present And Future

You are likely gearing up to plan your strategies for the upcoming year, if you aren’t you should be.  Your goal is to make your dealership better than it has ever been. While developing your budgets, strategies and projections for next year, make sure you don’t forget staffing plans.  Staffing plans are an often overlooked area of planning.  Being aware of staffing and hiring needs and making a plan to address them can be the key between a mediocre year and a great one.

The simplest form of staffing plan, the hiring projection, is probably the best place to start if you have never created a staffing plan before. To effectively create a hiring projection you must account for three time periods; the past, the future and the present.

The Past
Past performance is your best indicator of what your future performance will be.  If you sold 500 cars last year, it is probably safe to say that you could sell as many next year.  The same idea applies to our staffing needs.  The specific metric we look at from the past is our employee turnover rate if you don’t know how to calculate this read my article from last month online at 

The company I work for has about 200 employees in its dealerships.  If we were to assume a turnover rate similar to the national average for our industry, seven percent per month, then yearly turnover would be about 84 percent. This would translate to about 168 employees leaving the dealership in the course of a year.  If 2006 was an average year for the dealerships, we can assume with some certainty that something similar will happen in 2007.  Now to finish the projection, we need to look to the future.

The Future
The main reason to create your hiring projection the same time as your projections and budgets is to address future needs.  The strategies and changes you are planning to implement to increase your business will directly affect your hiring needs throughout the year.

As an example, a dealership plans to consolidate two dealerships into one new location during the upcoming year.  As a result of this move and consolidation, the dealerships estimate a large increase in lot traffic, necessitating a 20 percent increase sales personnel or nine additional employees. An increase this large would also require an additional sales manager to supervise these employees.  That brings the total to 10 new positions in the sales department.

The increase in sales consultants would, hopefully, increase sales, which would cause changes to be necessary in fixed operations as well.  More cars sold equals more cars entering service department for routine maintenance and repairs, thus requiring more staff for the service and parts departments.  All in all six additional employees would be needed in the fixed operations departments.

These 16 additional employees combined with previous turnover projections provide a hiring projection for 2007, 184 people.  That is about one person every two days. Clearly, this will require a significant investment in both time and money from the dealership and its managers. 

I have used simplified examples to illustrate the process.  In reality, you will need to look at all of your upcoming projects and budgets for each department in your dealership and determine what staffing levels will be necessary to address your changes. Often this will require you to increase staff, but you will also run into situations where a decrease in staff will be most appropriate.

The Present
Now, after a hiring projection has been determined, the question remains will this number stand firm at 184? Of course not.  It’s a hiring projection, and just like any sales projection, it can, and will, fluctuate.  It may be better; it may be worse.  Due to this fact, we have to take the third time period into consideration; the present.

There is little to say about the effect of the present on a hiring projection. By its very nature, the present is always changing, just like hiring needs.  We all know that no matter how much we plan ahead, new things will come up that require us to change our plans and strategies.  Unfortunately, you can not prepare for every possibility. 

The hiring projection is the simplest form of a staffing plan.  It allows you to get an overall grasp on what you will need to look at throughout the year.  It provides a benchmark to measure your hiring against throughout the upcoming year.  In almost all cases, you will strive to come in under your hiring projection. Hiring less people than you have projected will usually mean that you are hiring the right people, at the right time, for the right job – causing a domino effect of success for your dealership.

By proactively planning staffing and hiring needs along with other business strategies, your dealership’s goals can be attained.  Staffing plans are some of the most important projection you will make.  We all know it’s the employees of the dealership that really drive business.  Take the time to think about next year’s hiring needs and you’ll be better prepared than ever before.

Vol 3, Issue 12



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